Dollar Index trying to dig in heels, halt correction below 90.00

• The Dollar is struggling to halt slide as bond yields retreat.
• Threats of trade wars, severe tariffs crimping Dollar upside.

The US Dollar Index is still on the low side, currently trading just shy of the 90.00 mark in the early week.

The month of March is shaping up to be a downer for the Greenback with the Dollar Index (DXY)  off of its high mark of 90.93. Political tension within the US continues to plague the US Dollar following President Trump's recent promise to impose strict tariffs on steel and aluminum imports; Trump's protectionist tariffs have drawn the ire of developed nations around the world, with many of the US' key trading partners accusing the President of trying to spark a trade war. The USD recently received a boost as US Treasury yields spiked to multi-year highs, but that support has disappeared with the 10-year US Treasury note backing down from the key 3% mark, and the US Dollar finds itself on the backfoot heading into the Non-Farm Payroll (NFP) territory unless market sentiment takes an abrupt turn. 

Friday will see another iteration of the key NFP report from the United States, and the market-mover is primed to cap off a potentially volatile week that sees the US Markit PMIs later Monday at 14:45 GMT, followed by the Factory Orders and Weekly Crude Stocks numbers on Tuesday at 15:00 and 21:00 respectively, Wednesday's ADP Employment Change at 13:15 closely followed by the Trade Balance and Labor Cost figures at 13:30, and the Initial and Continuing Jobless Claims on Thursday, at 13:30.

DXY Technicals

The Dollar Index is off a recent high of 90.93, and the correction could deepen unless buyers step in. The floor is still holding after February's dip to 88.25 but declines in the Greenback could accelerate if support doesn't hold at 89.60 or 88.60, while resistance sits above from 90.50 to the 91.00 handle.